The roller coaster turns again! Gold may suffer the longest consecutive decline in history, with the situation in Iran becoming a "liquidity magnet".

As investors weigh conflicting statements from various parties in the Middle East situation, the price of gold continues to decline. The US postponed its strike on Iran's energy infrastructure, providing only a brief respite for this precious metal in the midst of intense wartime downward trend. During volatile trading periods, gold prices fell by 1.8% at one point, after previously rising by nearly 1%, showing a trend roughly in sync with the stock market and in reverse correlation with oil prices. President Trump announced a five-day delay in his previously threatened strike on Iran's power plants, stating that "productive discussions" were held on Monday. However, an Iranian official ruled out the possibility of negotiations, and there are reports that US allies in the Gulf region may join the conflict. The conflict-induced rise in energy prices increases inflation risks, prompting investors to sell relatively liquid and profitable gold positions in favor of other assets. Gold prices fell by nearly 2% in the previous trading day, marking the ninth consecutive day of decline; if it continues for a tenth day, it will set a record for the longest consecutive decline in history. Despite Trump's announcement of a temporary delay in the strike, the outcome of any negotiations and the future passage of ships through the Strait of Hormuz remain uncertain. Even the damage to existing energy infrastructure will take time to repair. This means that the threat of inflation persists, and market expectations of interest rate hikes by the Fed and other central banks have not diminished, posing unfavorable factors for the interest-less precious metal. Sukui Cooper, head of commodities research at Standard Chartered Bank, said, "The relative weakness exhibited by gold in this round of correction is more severe than usual." He added, "After a period of extreme panic, gold has shown a downward pressure for four to six weeks, which is not uncommon, as gold has been proven to be a liquid asset when needed." Similar situations occurred after the Russia-Ukraine conflict in early 2022. At that time, the safe haven asset gold initially soared, but then experienced months of decline as the energy price shock affected the market and exacerbated inflation pressures. Peter Quincey, global FX strategy director at Union Bancaire Privee UBP SA, said, "In such major crises, you often see investors selling off heavily weighted and well-performing assets to compensate for additional margin requirements for underperforming assets such as stocks and bonds." He stated that gold exhibited similar behavior during the 2022 and 2008 global financial crises. "Short-term price changes are mainly related to positions," he said, adding that long-term driving factors have not changed. Despite a decline of nearly 17% in gold prices from the outbreak of hostilities at the end of February until Monday's close, gold prices had previously experienced a sustained upward trend, supported by geopolitical and trade tensions, continuous central bank purchases, among other factors. Some of the countries that continue to increase their gold holdings are energy importers, so the increase in oil and gas import bills due to war means that the US dollar reserves available for purchasing gold are reduced. At the time of writing, spot gold was down 1.07% at $4359.80 per ounce. Silver fell by 2.4% to $67.49, while platinum and palladium also declined. The Bloomberg Dollar Spot Index, which measures the US dollar's exchange rate, rose by 0.24%, after falling by 0.4% at the previous close.